Tag: Objectives

  • The Objectives and Functions of RBI (Reserve Bank of India)!

    The Objectives and Functions of RBI (Reserve Bank of India)!

    Learn about the objectives and functions of RBI and how it influences the management of commercial banks in India. RBI (Reserve Bank of India) is the apex financial institution of the country’s financial system entrusted with the task of control, supervision, promotion, development, and planning. RBI is the queen bee of the Indian financial system which influences the commercial banks’ management in more than one way. The RBI influences the management of commercial banks through its various policies, directions, and regulations. Its role in bank management is unique. The RBI performs the four basic functions of management, viz., planning, organizing, directing and controlling in laying a strong foundation for the functioning of commercial banks.

    Learn and explain the Objectives and Functions of RBI (Reserve Bank of India)!

    History of RBI (Reserve Bank of India)!

    In 1921, the Imperial Bank of India was established to act as the central bank of India by the British Government. Unfortunately, Imperial Bank failed to show its performance up to the mark and didn’t achieve any success as the Central Bank. Then the Government asked the Hilton Young Commission in 1925 to view on this subject.

    The commission submitted their reports saying that one single organization can’t be able to act as two separate agencies (both credit and currency control). So, it’s required to set up a brand new central bank. On 1st April 1935, the Reserve Bank of India was set up. In January 1949, RBI was nationalized.

    Objectives of the RBI (Reserve Bank of India)!

    The Preamble to the Reserve Bank of India Act, 1934 spells out the objectives of the Reserve Bank as:

    “To regulate the issue of Bank notes and the keeping of reserves with a view to securing monetary stability in India and generally to operate the currency and credit system of the country to its advantage.”

    Before the establishment of the Reserve Bank, the Indian financial system was inadequate on account of the inherent weakness of the dual control of currency by the Central Government and of credit by the Imperial Bank of India.

    The Hilton-Young Commission, therefore, recommended that the dichotomy of functions and division of responsibility for control of currency and credit and the divergent policies in this respect must ended by setting of a central bank – called the Reserve Bank of India – which would regulate the financial policy and develop banking facilities throughout the country.

    Hence, the Bank was established with this primary object in view. Another objective of the Reserve Bank has been to remain free from political influence and be in successful operation for maintaining financial stability and credit.

    The fundamental object of the Reserve Bank of India is to discharge purely central banking functions in the Indian money market, i.e., to act as the note-issuing authority, bankers’ bank, and banker to the government, and to promote the growth of the economy within the framework of the general economic policy of the Government, consistent with the need of maintenance of price stability.

    A significant object of the Reserve -Bank of India has also been to assist the planned process of development of the Indian economy. Besides the traditional central banking functions, with the launching of the five-year plans in the country. The Reserve Bank of India has been moving ahead in performing a host of developmental and promotional functions. Which are normally beyond the purview of a traditional Central Bank.

    Functions of the RBI (Reserve Bank of India)!

    As per the RBI Act 1934, it performs 3 types of functions as that of any other central bank.

    They are:

    1. Banking Functions
    2. Supervisory Functions and
    3. Promotional Functions.

    The main function of the RBI is to regulate the money supply in the country. Moreover, it has been directed to take care of agriculture, industry, export promotion, etc. The RBI is also responsible for the maintenance of the external value of the rupee.

    #Banking Functions:

    Now, explain the functions;

    1. Bank of Issue:

    Under section 22 of the Reserve Bank of India Act, the bank has the sole right to issue bank notes of all denominations. The distribution of one rupee notes and coins and small coins all over the country undertaken by the Reserve Bank as the agent of the Government.

    The Reserve Bank has a separate Issue Department which entrusted with the issue of currency notes. The assets and liabilities of the Issue Department kept separate from those of other Banking Departments.

    Originally, the assets of the Issue Department were to consist of not less than two-fifths of gold coin. Gold bullion or sterling securities provided the amount of gold was not less than Rs. 40 crores in value. The remaining three-fifths of the assets might held in rupee coins. Government of India rupee securities, eligible bills of exchange, and promissory notes payable in India.

    Due to the exigencies of the Second World War and the post-war period, these provisions were considerably modified. Since 1957, the Reserve Bank of India required to maintain gold and foreign exchange reserves of Rs. 200 crores, of which at least Rs. 115 crores should be in gold. The system as it exists today known,-as the minimum reserve system.

    2. Banker to Government:

    The second important function of the Reserve Bank of India is to act as a Government banker, agent, and adviser. The Reserve Bank is the agent of the Central Government and of all State Governments in India except that of Jammu and Kashmir.

    The Reserve Bank must transact Government business, via to keep the cash balances as deposits free of interest. To receive and to make payments on behalf of the Government and to carry out their exchange remittances and other banking operations.

    The Reserve Bank of India helps the Government—both the Union and the States to float new loans and to manage public debt. The Bank makes ways and means advances to the Governments for 90 days. It makes loans and advances to the States and local authorities. It acts as the adviser to the Government on all monetary and banking matters.

    3. Banker’s Bank and Lender of the Last Resort:

    The Reserve Bank of India acts as the banker’s bank. According to the provisions of the Banking Companies Act of 1949, every scheduled bank was required to maintain with the Reserve Bank a cash balance equivalent to 5% of its demand liabilities and 2 percent of its time liabilities in India.

    By an amendment of 1962, the distinction between demand and time liabilities was abolished and banks have been asked to keep cash reserves equal to 3 percent of their aggregate deposit liabilities. The minimum cash requirements can changed by the Reserve Bank of India.

    The scheduled banks can borrow from the Reserve Bank of India based on eligible securities or get financial accommodation in times of need or stringency by rediscounting bills of exchange. Since commercial banks can always expect the Reserve Bank of India to come to their help in times of banking crisis the Reserve Bank becomes not only the banker’s bank but also the lender of the last resort.

    4. The controller of Credit:

    The Reserve Bank of India is the controller of credit i.e. it has the power to influence the volume of credit created by banks in India. It can do so by changing the Bank rate or through open market operations.

    According to the Banking Regulation Act of 1949, the Reserve Bank of India can ask any particular bank or the whole banking system not to lend to particular groups or persons based on certain types of securities. Since 1956, selective controls of credit are increasingly being used by the Reserve Bank.

    The Reserve Bank of India armed with many more powers to control the Indian money market. Every bank has to get a license from the Reserve Bank of India to do banking business within India. The license can canceled by the Reserve Bank if certain stipulated conditions not fulfilled. Every bank will have to get the permission of the Reserve Bank before it can open a new branch.

    Each scheduled bank must send a weekly return to the Reserve Bank showing in detail, its assets and liabilities. This power of the Reserve Bank to call for information also intended to give it effective control of the credit system. The Reserve Bank has also the power to inspect the accounts of any commercial bank.

    As the supreme banking authority in the country, the Reserve Bank of India, therefore, has the following powers:

    1. It holds the cash reserves of all the scheduled banks.
    2. It controls the credit operations of banks through quantitative and qualitative control.
    3. It controls the banking system through the system of licensing, inspection, and calling for information.
    4. It acts as the lender of the last resort by providing re-discount facilities to scheduled banks.

    5. Custodian of Foreign Reserve:

    It is the responsibility of the Reserve Bank to stabilize the external value of the national currency. The Reserve Bank keeps gold and foreign currencies as reserves against note issues and also meets the adverse balance of payments with other countries. It also manages foreign currency by the controls imposed by the government.

    As far as the external sector is concerned, the task of the RBI has the following dimensions:

    • To administer the Foreign Exchange Control;
    • To choose, the exchange rate system and fix or manage the exchange rate between the rupee and other currencies;
    • To manage exchange reserves;
    • To interact or negotiate with the monetary authorities of the Sterling Area, Asian Clearing Union, and other countries. With International financial institutions such as the IMF, World Bank, and Asian Development Bank.

    The RBI is the custodian of the country’s foreign exchange reserves, id it vested with the responsibility of managing the investment and utilization of the reserves in the most advantageous manner. The RBI achieves this through buying and selling of foreign exchange markets, from and to scheduled banks. Which, are the authorized dealers in the Indian foreign exchange market? The Bank manages the investment of reserves in gold counts abroad and the shares and securities issued by foreign governments and international banks or financial institutions.

    #Supervisory Functions:

    In addition to its traditional central banking functions, the Reserve Bank has certain non-monetary functions of the nature of supervision of banks and the promotion of sound banking in India.

    The Reserve Bank Act, of 1934, and the Banking Regulation Act, of 1949 have given the RBI wide powers of supervision and control over commercial and cooperative banks, relating to licensing and establishments, branch expansion, the liquidity of their assets, management and methods of working, amalgamation, reconstruction, and liquidation.

    The RBI authorized to carry out the periodical inspection of the banks and to call for returns and necessary information from them. The nationalization of 14 major Indian scheduled banks in July 1969 imposed new responsibilities on the RBI for directing the growth of banking and credit policies towards the more rapid development of the economy and realization of certain desired social objectives.

    The supervisory functions of the RBI have helped a great deal in improving the standard of banking in India to develop sound lines and improve the methods of their operation.

    #Promotional Functions!

    With economic growth assuming a new urgency since independence, the range of the Reserve Bank’s functions has steadily widened. The Bank now performs a variety of developmental and promotional functions. Which, at one time, were regarded as outside the normal scope of central banking.

    The Reserve Bank was asked to promote banking habits, extend banking facilities to rural and semi-urban areas, and establish and promote new specialized financing agencies. Accordingly, the Reserve Bank has helped in the setting up of the Industrial Finance Corporation of India and the State Financial Corporations. It set up the Deposit Insurance Corporation in 1962, the Unit Trust of India in 1964, the Industrial Development Bank of India also in 1964, the Agricultural Refinance Corporation of India in 1963, and the Industrial Reconstruction Corporation of India in 1972.

    These institutions were set up directly or indirectly by the Reserve Bank to promote saving habits to mobilize savings, and to provide industrial finance as well as agricultural finance. As far back as 1935, the Reserve Bank of India set up the Agricultural Credit Department to provide agricultural credit. But only since 1951, the Bank’s role in this field has become extremely important.

    The Bank has developed the co-operative credit movement to encourage saving, to eliminate moneylenders from the villages, and to route its short-term credit to agriculture. The RBI has set up the Agricultural Refinance and Development Corporation to provide long-term finance to farmers.

  • Cost Accounting: Objectives, Nature, and Scope

    Cost Accounting: Objectives, Nature, and Scope

    Cost accounting examines the cost structure of a business. It does so by collecting information about the costs incurred by a company’s activities, assigning selected costs to products and services and other cost objects, and evaluating the efficiency of cost usage. Discuss the topic, the Concept of Cost Accounting: Meaning of Cost Accounting, Definition of Cost Accounting, Objectives of Cost Accounting, Nature and Scope of Cost Accounting, and Limitations of Cost Accounting! It is mostly concern with developing an understanding of where a company earns and loses money, and providing input into decisions to generate profits in the future. Also learned, Management Accounting; Objectives, Nature, and Scope.

    Learn, Explain Cost Accounting: Objectives, Nature, and Scope.

    Cost accounting involves the techniques for as: 1) Determining the costs of products, processes, projects, etc. to report the correct amounts on the financial statements, and 2) Assisting management in making decisions and in the planning and control of an organization.

    For example, cost accounts used to compute the unit cost of a manufacturer’s products to report the cost of inventory on its balance sheet and the cost of goods sold on its income statement. This is achieving with techniques such as the allocation of manufacturing overhead costs and through the use of process costing, operations costing, and job-order costing systems.

    It assists management by providing analysis of cost behavior, cost-volume-profit relationships, operational and capital budgeting, standard costing, variance analyses for costs and revenues, transfer pricing, activity-based costing, and more. They had their roots in manufacturing businesses, but today it extends to service businesses.

    For example, a bank will use cost accounting to determine the cost of processing a customer’s check and/or a deposit. This, in turn, may provide management with guidance in the pricing of these services.

    Key activities include:

    • Defining costs as direct materials, direct labor, fixed overhead, variable overhead, and period costs.
    • Assisting the engineering and procurement departments in generating standard costs, if a company uses a standard costing system.
    • Using an allocation methodology to assign all costs except period costs to products and services and other cost objects.
    • Defining the transfer prices at which components and parts are selling from one subsidiary of a parent company to another subsidiary.
    • Examining costs incurred about activities conducted, to see if the company is using its resources effectively.
    • Highlighting any changes in the trend of various costs incurred.
    • Analyzing costs that will change as the result of a business decision.
    • Evaluating the need for capital expenditures.
    • Building a budget model that forecasts changes in costs based on expected activity levels.
    • Determining whether costs can be reduced.
    • Providing cost reports to management, so they can better operate the business.
    • Participating in the calculation of costs that will require to manufacture a new product design, and.
    • Analyzing the system of production to understand where bottlenecks are position, and how they impact the throughput generate by the entire manufacturing system.

    Meaning of Cost Accounting:

    An accounting system is to make available necessary and accurate information for all those who are interested in the welfare of the organization. The requirements of the majority of them are satisfied using financial accounting. However, the management requires far more detailed information than what conventional financial accounting can offer.

    The focus of the management lies not in the past but on the future. For a businessman who manufactures goods or renders services, cost accounts a useful tool. It was developed on account of limitations of financial accounting and is the extension of financial accounting. The advent of the factory system gave an impetus to the development of cost accounting.

    It is a method of accounting for cost. The process of recording and accounting for all the elements of the cost calls cost accounting.

    Definition of Cost Accounting:

    The Institute of Cost and Works Accountants, London defines costing as,

    “The process of accounting for cost from the point at which expenditure incur or commit to the establishment of its ultimate relationship with cost centers and cost units. In its wider usage, it embraces the preparation of statistical data, the application of cost control methods and the ascertainment of the profitability of activities carry out or plan.”

    The Institute of Cost and Works Accountants, India defines cost accounting as,

    “The technique and process of ascertainment of costs. Cost accounts the process of accounting for costs, which begins with the recording of expenses or the bases on which they are calculating and ends with the preparation of statistical data.”

    To put it simply, when the accounting process is applying to the elements of costs (i.e., Materials, Labor and Other expenses), it becomes Cost Accounting.

    Objectives of Cost Accounting:

    It was born to fulfill the needs of manufacturing companies. Its a mechanism of accounting through which costs of goods or services are ascertaining and control for different purposes. It helps to ascertain the true cost of every operation, through a close watch, say, cost analysis and allocation.

    The main objectives of cost accounting are as follows:-

    1] Cost Ascertainment: 

    The main objective of cost accounts to find out the cost of product, process, job, contract, service or any unit of production. It is done through various methods and techniques.

    2] Cost Control: 

    The very basic function of cost accounts to control costs. A comparison of actual costs with standards reveals the discrepancies (Variances). The variances reveal whether the cost is within the control or not. Remedial actions are suggesting to control the costs which are not within control.

    3] Cost Reduction: 

    Cost reduction refers to the real and permanent reduction in the unit cost of goods manufactured or services rendered without affecting the use intended. It can be done with the help of techniques called budgetary control, standard costing, material control, labor control, and overheads control.

    4] Fixation of Selling Price: 

    The price of any product consists of total cost and the margin required. Cost data are useful in the determination of selling price or quotations. It provides detailed information regarding various components of cost. It also provides information in terms of fixed cost and variable costs, so that the extent of price reduction can be decided.

    5] Framing business policy: 

    It helps management in formulating business policy and decision making. Break-even analysis, cost volume profit relationships, differential costing, etc help make decisions regarding key areas of the business.

    Nature and Scope of Cost Accounting:

    Cost accounts concerned with ascertainment and control of costs. The information provided by cost-accounting to the management is helpful for cost control and cost reduction through functions of planning, decision making, and control. Initially, they confined itself to cost ascertainment and presentation of the same mainly to find out product cost.

    With the introduction of large-scale production, the scope was widened and providing information for cost control and cost reduction has assuming equal significance along with finding out the cost of production. To start with cost-accounting was apply in manufacturing activities but now it applies in service organizations, government organizations, local authorities, agricultural farms, Extractive industries and so on.

    The guide for the ascertainment of the cost of production. It discloses as profitable and unprofitable activities. They help management to eliminate unprofitable activities. It provides information for estimates and tenders. They disclose the losses occurring in the form of idle time spoilage or scrap etc. It also provides a perpetual inventory system.

    It helps to make effective control over inventory and for the preparation of interim financial statements. They help in controlling the cost of production with the help of budgetary control and standard costing. They provide data for future production policies. It discloses the relative efficiencies of different workers and for the fixation of wages to workers.

    Cost Accounting Objectives Nature and Scope
    Cost Accounting: Objectives, Nature, and Scope! #Pixabay.

    Limitations of Cost Accounting:

    The following limitations below are;

    • It is based on estimation: as cost accounting relies heavily on predetermined data, it is not reliable.
    • No uniform procedure in cost accounting: as there is no uniform procedure, with the same information different results may be arrived by different cost accounts.
    • A large number of conventions and estimate: There are several conventions and estimates in preparing cost records such as materials are issuing on an average (or) standard price, overheads are charging on the percentage basis, Therefore, the profits arrive from the cost records are not true.
    • Formalities are more: Many formalities are to be observed to obtain the benefit of cost accounting. Therefore, it does not apply to small and medium firms.
    • Expensive: Cost accounts expensive and requires reconciliation with financial records.
    • It is unnecessary: Cost accounts of recent origin and an enterprise can survive even without cost accounting.
    • Secondary data: It depends on financial statements for a lot of information. Any errors or shortcomings in that information creep into cost accounts also.
  • Management Accounting: Objectives, Nature, and Scope

    Management Accounting: Objectives, Nature, and Scope

    What is the definition of management accounting? Management accountants (also called managerial accountants) look at the events that happen in and around a business while considering the needs of the business. Management Accounting is comprising of two words “Management” and “Accounting”. Discuss the topic, Management Accounting: Meaning of Management Accounting, Definition of Management Accounting, Objectives of Management Accounting, Nature and Scope of Management Accounting, and Limitations of Management Accounting! From this, data and estimates emerge. Cost accounting is the process of translating these estimates and data into knowledge that will ultimately use to guide decision-making.

    Learn, Explain Management Accounting: Objectives, Nature, and Scope!

    Management Accounts a tool to assist management in achieving better planning and control over the organization. It is relevant for all kinds of an organization including a not-for-profit organization, government, or Sole Proprietorship’s. It has a significant place in the businesses and widely used by management to achieve better control and quality decision making. Also Learned, In the Hindi language: प्रबंधन लेखांकन का उद्देश्य, प्रकृति, और दायरा, Financial Accounting!

    Meaning of Management Accounting:

    Management Accounts not a specific system of accounting. It could be any form of accounting which enables a business to conduct more effectively and efficiently. It’s largely concerned with providing economic information to managers for achieving organizational goals. It is an extension of the horizon of cost accounting towards newer areas of management. Much management accounts information is financial but has been organizing in a manner relating directly to the decision at hand.

    Management Accounts comprised of two words ‘Management’ and ‘Accounting’. It means the study of the managerial aspect of accounting. The emphasis of management accounting is to redesign accounting in such a way that it is helpful to the management in the formation of policy, control of execution, and appreciation of effectiveness. Management Accounts of recent origin. This was first used in 1950 by a team of accountants visiting U. S. A under the auspices of Anglo-American Council on Productivity.

    Definition of Management Accounting:

    Definition: It is, also called managerial accounting or cost accounting, is the process of analyzing business costs and operations to prepare the internal financial report, records, and account to aid managers’ decision making process in achieving business goals. In other words, it is the act of making sense of financial and cost data and translating that data into useful information for management and officers within an organization.

    “Management accounting is the practical science of value creation within organizations in both the private and public sectors. It combines accounting, finance, and management with the leading edge techniques needed to drive successful businesses.”

    More of it:

    Anglo-American Council on Productivity defines as:

    “The presentation of accounting information in such a way as to assist management in the creation of policy and the day to day operation of an undertaking.”

    The American Accounting Association defines as:

    “The methods and concepts necessary for effective planning for choosing among alternative business actions and for control through the evaluation and interpretation of performances.”

    The Institute of Chartered Accountants of India defines as follows:

    “Such of its techniques and procedures by which accounting mainly seeks to aid the management collectively has come to be known as management accounting.”

    From these definitions, it is very clear that financial data is recorded, analyzed, and presented to the management in such a way that it becomes useful and helpful in planning and running business operations more systematically.

    Objectives of Management Accounting:

    The fundamental objectives of management accounting are to enable the management to maximize profits or minimize losses. The evolution of managerial accounting has given a new approach to the function of accounting.

    The main objectives of management accounting are as follows:

    Planning and policy formulation:

    Planning involves forecasting based on available information, setting goals; framing policies determining the alternative courses of action, and deciding on the program of activities. Management Accounts can help greatly in this direction. It facilitates the preparation of statements in light of past results and gives an estimation for the future.

    Interpretation process:

    Management Accounts to present financial information to the management. Financial information is technical. Therefore, it must present in such a way that it is easily understood. It presents accounting information with the help of statistical devices like charts, diagrams, graphs, etc.

    Assists in the Decision-making process: 

    With the help of various modern techniques management accounting makes the decision-making process more scientific. Data relating to cost, price, profit, and savings for each of the available alternatives are collected and analyzed and provides a base for making sound decisions.

    Controlling:

    It is useful for managerial control. Their tools like standard costing and budgetary control help control performance. Cost control is effected through the use of standard costing and departmental control is made possible through the use of budgets. The performance of every individual is controlled with the help of managerial accounting.

    Reporting:

    Management Accounts keeps the management fully informed about the latest position of concern through reporting. It helps management to take proper and quick decisions. The performance of various departments is regularly reported to the top management.

    Facilitates Organizing:

    “Return on Capital Employed” is one of the tools of Management Accounts. Since managerial accounting stresses more on Responsibility Centre’s to control costs and responsibilities, it also facilitates decentralization to a greater extent. Thus, it helps set up an effective and efficient organization framework.

    Facilitates Coordination of Operations:

    Management accounts provide tools for overall control and coordination of business operations. Budgets are an important means of coordination.

    Nature and Scope of Management Accounting:

    Managerial Accounting involves the furnishing of accounting data to the management for basing its decisions. It helps in improving efficiency and achieving organizational goals. You may know is that Comparative analysis is the scope of management accounting.

    The following paragraphs discuss the nature and scope of management accounting.

    Provides accounting information: 

    Management accounting is based on accounting information. It is a service function and it provides the necessary information to different levels of management. Managerial Accounting involves the presentation of information in a way it suits managerial needs. The accounting data collected by the accounting department is used for reviewing various policy decisions.

    Cause and effect analysis: 

    The role of financial accounting is limited to find out the ultimate result, i.e., profit and loss; Managerial Accounting goes a step further. Managerial Accounting discusses the cause and effect relationship. The reasons for the loss are probed and the factors directly influencing the profitability are also studied. Profits are compared to sales, different expenditures, current assets, interest payable’s, share capital, etc.

    Use of special techniques and concepts:

    It uses special techniques and concepts according to the necessity to make accounting data more useful. The techniques usually used include financial planning and analyses, standard costing, budgetary control, marginal costing, project appraisal, control accounting, etc.

    Taking important decisions: 

    It supplies the necessary information to the management which may be useful for its decisions. The historical data is studied to see its possible impact on future decisions. The implications of various decisions are also taking into account.

    Achieving objectives:

    It is uses accounting information in such a way that it helps in formatting plans and setting up objectives. Comparing actual performance with targeted figures will give an idea to the management about the performance of various departments. When there are deviations, corrective measures can take at once with the help of budgetary control and standard costing.

    No fixed norms: 

    No specific rules are followed in Managerial Accounting as that of financial accounting. Though the tools are the same, their use differs from concern to concern. The deriving of conclusions also depends upon the intelligence of the management accountant. The presentation will be in the way which suits the concern most.

    Increase in efficiency: 

    The purpose of using accounting information is to increase the efficiency of the concern. The performance appraisal will enable the management to pinpoint efficient and inefficient spots. An effort makes to take corrective measures so that efficiency improves. The constant review will make the staff cost-conscious.

    Supplies information and not the decision: 

    The management accountant is only to guide and not to supply decisions. The data is to use by the management for taking various decisions. “How is the data to utilize” will depend upon the caliber and efficiency of the management.

    Concerned with forecasting: 

    The management accounts concerned with the future. It helps the management in planning and forecasting. The historical information is used to plan the future course of action. The information is supplied to the object to guide management in making future decisions.

    Techniques and Procedures Design and Installation:

    Management accounting is identifying with the most productive and monetary arrangement of accounting reasonable for any size and kind of embraced. Additionally, it utilizes the best utilization of mechanical and electronic gadgets. Maybe you got your answer; 10 points of Nature of Management Accounting with their scope.

    A portion of the Acts, which have their impact on management choices, are as per the following:

    The Companies Act, MRTP Act, FEMA, SEBI Regulations, and so forth.

    Inside Audit:

    This incorporates the improvement of an appropriate arrangement of inside reviews for inner control. An interior review is led by the business association with the assistance of a paid worker who has careful accounting information. All the significant records are kept up under the management accounting framework with the goal that the inner review is directed in a successful way.

    Inner Reporting:

    This incorporates the arrangement of quarterly, half-yearly, and other interval reports and pays articulations, income and assets stream explanations, scarp reports, and so on.

    Limitations of Management Accounting:

    Hence, it suffers from all the limitations of a new discipline. Some of these limitations are:

    Limitations of Accounting Records:

    Management accounting derives its information from financial accounting, cost accounting, and other records. It is concerned with the rearrangement or modification of data. The correctness or otherwise of the Managerial Accounting depends upon the correctness of these basic records.

    It is only a Tool: 

    Management accounts not alternate or substitute for management. It is a mere tool for management. Ultimate decisions are taking by management and not by management accounts.

    Heavy Cost of Installation: 

    The installation of the Managerial Accounting system needs a very elaborate organization. This results in heavy investment which can afford only by big concerns.

    Personal Bias: 

    The interpretation of financial information depends upon the capacity of the interpreter as one has to make a personal judgment. Personal prejudices and biases affect the objectivity of decisions.

    Psychological Resistance:

    The installation of Managerial Accounting involves the basic change in the organization set up. New rules and regulations are also required to frame which affects the number of personnel, and hence there is a possibility of resistance from some or the other.

    Evolutionary stage: 

    Management accounts only in a developmental stage. Its concepts and conventions are not as exact and established as those of other branches of accounting. Therefore, its results depend to a very great extent upon the intelligent interpretation of the data of managerial use.

    Provides only Data:

    Managerial Accounting provides data and not decisions. It only informs, not prescribes. This limitation should also keep in mind while using the techniques of management accounting.

    Broad-based Scope: 

    The scope of management accounts for wide and this creates many difficulties in the implementation process. Management requires information from both accounting as well as non-accounting sources. It leads to inexactness and subjectivity in the conclusion obtained through it. Also Learned, In the Hindi language: Management Accounting: Objectives, Nature, and Scope (प्रबंधन लेखांकन का उद्देश्य, प्रकृति, और दायरा).

    Management Accounting Objectives Nature and Scope
    Management Accounting: Objectives, Nature, and Scope, Image credit from @Pixabay.

  • Management Features Functions Importance Levels Objectives

    Management Features Functions Importance Levels Objectives

    Before starting Studying Management Features, Functions, Importance, Levels, and Objectives! What is it? After that, we can Be Discussing the Features of Management, Functions of Management, Importance of Management, Levels of Management, and Objectives of Management! Also learned, Discuss the Subsidiary Functions of Management: Features, Functions, Importance, Levels, and Objectives!

    Learn More, Explain Management Features, Functions, Importance, Levels, and Objectives!

    Do you want to know, What is a Management? Management is the administration of an organization, whether it is a business, a not-for-profit organization, or a government body. Management includes the activities of setting the strategy of an organization and coordinating the efforts of its employees (or of volunteers) to accomplish its objectives through the application of available resources, such as financial, natural, technological, and human resources.

    The main points of discussion of Management follow are:

    • Features of Management.
    • Functions of Management.
    • Importance of Management.
    • Levels of Management, and.
    • Also, Objectives of Management.
    Management_ Features Functions Importance Levels and Objectives - ilearnlot
    Management Features, Functions, Importance, Levels, and Objectives!

    Now Explain Each one of the Upper Contents:

    #Features of Management!

    Management is an activity concerned with guiding human and also physical resources such that organizational goals can be achieved. Nature and features of management can exist highlighted as: –

    Management is Goal-Oriented: 

    The success of any management activity is assessed by its achievement of predetermined goals or objectives. Management is a purposeful activity. It is a tool that helps users of human & physical resources to fulfill pre-determined goals. For example, the goal of an enterprise is maximum consumer satisfaction by producing quality goods at reasonable prices. This can be achieved by employing efficient persons and also making better use of scarce resources.

    Management integrates Human, Physical, and Financial Resources: 

    In an organization, human beings work with non-human resources like machines. Also, Materials, financial assets, buildings, etc. Management integrates human efforts into those resources. It brings harmony to human, physical and financial resources.

    Management is Continuous: 

    Management is an ongoing process. Also, It involves the continuous handling of problems and issues. It is concerned with identifying the problem and taking appropriate steps to solve it. E.g. the target of a company is maximum production. For achieving this target various policies have to frame but this is not the end. Marketing and Advertising are also to exist done. For this policies have to exist again framed. Hence this is an ongoing process.

    Management is all-pervasive: 

    Management exists required in all types of organizations whether it is political, social, cultural, or business because it helps and directs various efforts towards a definite purpose. Thus clubs, hospitals, political parties, colleges, hospitals, business firms all require management. Whenever more than one person exists engaged in working for a common goal, management is necessary. Whether it is a small business firm that may engage in trading or a large firm like Tata Iron & Steel, management exists required everywhere irrespective of size or type of activity.

    Management is a Group Activity: 

    Management is very much less concerned with individual efforts. Also, It is more concerned with groups. It involves the use of group effort to achieve the predetermined goal of management of ABC & Co. is good refers to a group of persons managing the enterprise.

    #Functions of Management!

    Above you may understand the features of management; Now, Management has stood described as a social process involving responsibility for economical and effective planning & regulation of the operation of an enterprise in the fulfillment of given purposes. It is a dynamic process consisting of various elements and activities. These activities are different from operative functions like marketing, finance, purchase, etc. Rather these activities are common to every manager irrespective of his level or status.

    Different experts have classified functions of management. According to George & Jerry, “There are four fundamental functions of management i.e. planning, organizing, actuating and controlling”.

    According to Henry Fayol, “To manage is to forecast and plan, to organize, to command, & to control”. Whereas Luther Gullick has given a keyword ’POSDCORB’ where P stands for Planning, O for Organizing, S for Staffing, D for Directing, Co for Co-ordination, R for reporting & B for Budgeting. But the most widely accepted are functions of management given by KOONTZ and O’DONNELL i.e. Planning, Organizing, Staffing, Directing, and Controlling.

    For theoretical purposes, it may be convenient to separate the function of management but practically these functions are overlapping in nature i.e. they are highly inseparable. Each function blends into the other & each affects the performance of others.

    five basic functions;

    According to Fayol, management operates through five basic functions: planning, organizing, coordinating, commanding, and controlling.

    • Planning: Deciding what needs to happen in the future and generating plans for action (deciding in advance).
    • Organizing (or staffing): Making sure the human and non-human resources are put into place.
    • Coordinating: Creating a structure through which an organization’s goals can be accomplished.
    • Commanding (or leading): Determining what must be done in a situation and also getting people to do it.
    • Controlling: Checking progress against plans.

    Management refers to the activities, and often the group of people, involved in the four general functions:

    1. Planning.
    2. Organizing.
    3. Staffing.
    4. Directing, and.
    5. Also, Controlling.

    Now Explain it to them:

    #Planning:

    It is the ongoing process of developing the business’s mission and also objectives and determining how they will exist accomplished. Planning includes both the broadcast view of the organization, e.g. its mission and the narrowest, e.g. a tactic for accomplishing a specific goal.

    #Organizing:

    Organizing is an essential function of management. Also, It is the process of accumulating resources from different sources to work according to the plans laid out by the management.

    #Staffing:

    It functions in which qualified people exist appointed to different posts relating to their skills and strengths. The activities included in this function are recruiting, hiring, training, evaluating, and compensating.

    #Directing:

    Directing is a function that comes after staffing of the organization, it is the function in which the management exists supposed to lead, direct to a specific goal and also motivate the employees for the achievement of any objective, big or small.

    #Controlling:

    It is a function in which the performance of the organization exists measured and then evaluated after which the standard observed exists determined to be either good or bad, which, in turn, leads to taking preventive and corrective measures.

    #Importance of Management!

    It helps in Achieving Group Goals: 

    You have to study and understand the above functions and features of management; It arranges the factors of production, assembles and also organizes the resources, effectively integrates the resources to achieve goals. Also, It directs group efforts towards the achievement of pre-determined goals. By defining the objective of the organization clearly, there would be no wastage of time, money, and effort. Management converts disorganized resources of men, machines, money, etc. into a useful enterprise. These resources exist coordinated, directed, and controlled in such a manner that enterprises work towards the attainment of goals.

    Optimum Utilization of Resources: 

    Management utilizes all the physical & human resources productively. This leads to efficacy in management. Management provides maximum utilization of scarce resources by selecting its best possible alternate use in industry from out of various uses. It makes use of experts, professional and these services lead to the use of their skills, knowledge, and proper utilization and avoids wastage. If employees and machines are producing their maximum there is no under the employment of any resources.

    Reduces Costs: 

    It gets maximum results through minimum input by proper planning and by using minimum input & getting maximum output. Also, Management uses physical, human, and financial resources in such a manner that results in the best combination. This helps in cost reduction.

    Establishes Sound Organization: 

    No overlapping of efforts (smooth and coordinated functions). To establish sound organizational structure is one of the objectives of management that is in tune with an objective of the organization and for the fulfillment of this, it establishes effective authority & responsibility relationship i.e. who is accountable to whom, who can give instructions to whom, who are superiors & who are subordinates. Also, Management fills up various positions with the right persons, having the right skills, training, and qualification. All jobs should be cleared for everyone.

    Establishes Equilibrium: 

    It enables the organization to survive in changing an environment. It keeps in touch with the changing environment. With the change in an external environment, the initial coordination of the organization must be changed. So it adapts organizations to changing demand for market / changing needs of societies. Also, It is responsible for the growth and survival of an organization.

    Essentials for Prosperity of Society: 

    Efficient management leads to better economic production which helps in turn to increase the welfare of people. Good management makes a difficult task easier by avoiding the wastage of scarce resources. Also, It improves the standard of living. It increases the profit which is beneficial to business and society will get maximum output at minimum cost by creating employment opportunities that generate income in hands. Organization comes with new products and likewise research beneficial for society.

    #Levels of Management!

    Levels of Management is a kind of demarcation between different managerial positions in an organization. The number of levels in management depends on the size of the business and workforce and increases when there’s an increase in both these determinants.

    The levels of management can be classified into three broad categories:

    • Top level / Administrative level.
    • Middle level, and.
    • Also, Low level/ First-line managers.

    Managers at the various levels enjoy various roles and responsibilities that are discussed below:

    1. Top Level of Management:

    The top management, which includes the board of directors, managing director, or chief executive, is the ultimate source of authority. It is responsible for managing the overall goals and policies for an organization and devotes its time to planning and synchronizing functions.

    The main functions of the top management are:

    • Issues important instructions to carry out various procedures.
    • Lays down the enterprise’s objectives and also policies.
    • Prepares strategic plans for the enterprise.
    • Also, Appoints the subordinates for middle level.
    • Coordinates and controls the activities of all the departments.
    • Maintains contact with the external world.
    • Guides and directs people at other levels.

    2. Middle Level of Management:

    Middle Level comprises the branch managers and departmental managers, who are responsible for the functioning of their department. They devote more time to organizational and also directional functions.

    Their functions can be emphasized as:

    • Implement the plans of the enterprise in accordance with the directives and policies of the top management.
    • Make plans for the sub-units of the enterprise.
    • Participate in employing & training the lower level management.
    • Interpret policies from top-level management to the lower level.
    • Also, Coordinates the activities within the division or department.
    • Delivers important reports and other crucial data to the top level management.
    • Evaluate performance of subordinate managers.
    • Inspires lower level managers towards better performance.

    3. Lower Level of Management:

    Also known as the supervisory or operative level of management, the lower level management comprises supervisors, section officers, foremen, superintendent, etc. Also, They are responsible for directing and controlling functions of management.

    Their functions and roles include:

    • Assigning tasks to various employees.
    • Guiding and instructing workforce for day to day activities.
    • Responsible for the quality and quantity of production.
    • Responsible for maintaining good relation in the company.
    • Interacts with the workforce directly and listen to their problems, offers them the valuable suggestion. Also, recommends their appeals to the higher level, if needed.
    • Provides training to the peers.
    • Prepare periodical reports about the workers’ performance.
    • Ensure discipline in the enterprise and motivates the workers.
    • Also, proper coordination between the people at various managerial levels is a must for any enterprise to run well and prosper.

    #Objectives of Management!

    The main objectives of management are:

    Getting Maximum Results with Minimum Efforts: 

    The main objective of management is to secure maximum outputs with minimum efforts & resources. Management is concerned with thinking & utilizing human, material & financial resources in such a manner that would result in the best combination. Also, This combination results in the reduction of various costs.

    Increasing the Efficiency of factors of Production: 

    Through proper utilization of various factors of production, their efficiency can be increased to a great extent which can be obtained by reducing spoilage, wastages, and breakage of all kinds, this, in turn, leads to saving of time, effort, and money which is essential for the growth & prosperity of the enterprise.

    Maximum Prosperity for Employer & Employees: 

    Management ensures the smooth and coordinated functioning of the enterprise. This, in turn, helps in providing maximum benefits to the employee in the shape of the good working condition, a suitable wage system, incentive plans on the one hand, and higher profits to the employer on the other hand.

    Human betterment & Social Justice: 

    Management serves as a tool for the upliftment as well as the betterment of society. Through increased productivity & employment, management ensures better standards of living for society. Also, It provides justice through its uniform policies.

  • Human Resource Management HRM Philosophies and Objectives

    Human Resource Management HRM Philosophies and Objectives

    Human resource management, HRM, or HR Philosophies and Objectives tips, is the strategic approach to the effective management of an organization’s workers; so, that they help the business gain a competitive advantage; it designs to maximize employee performance in the service of an employer’s strategic objectives. Best HRM Philosophies and Objectives PDF, PDF Reader, and Free Download. Also, The responsibilities of a human resource manager fall into three major areas: staffing, employee compensation and benefits, and defining/designing work. Also learn, Guide to Theories in HRM, Human Resource Management Philosophies and Objectives tips.

    Learn and Study, How to Human Resource Management HRM Philosophies and Objectives Tips.

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    As Best Philosophies of human resource management HRM:

    The Harvard and British human resource management schools and the two definitions cited from John Storey and Michael Armstrong and others suggest that human resource management is not without philosophy. Also, there are six elements on which human resource management philosophy and practices are based;

    First is ownership.

    Human resource management is and has to be owned and driven by the top management in the interests of the key stakeholders. Also, The stakeholders include shareholders, the managing board, the workers, clients, and customers. This is unlike the old tradition in which personnel management functions were mostly vested in designated officers under a personnel department. Under human resource management, the philosophy is that the top management owns; and, drives the agenda for effective people management in an organization.

    Second is Business:

    Business or organizational strategies form the basis for human resource strategies, and there should be a strategic fit. Also, This opposes putting emphasis on routine activities, reactive decision making and limited vision which seemed to characterize traditional personnel management. The implication is that an organization cannot have a strategic approach to managing the workforce without organizational and business strategy. Here, an aspect of flexible human resource planning comes in, and the ability to use the best forecasting techniques is a precondition for human resource acquisition, utilization, development, and retention.

    The third is Employees:

    Is considering employees as assets rather than liabilities. Under traditional personnel management philosophy, training and development of employees were quite often seen as a cost that should be avoided whenever possible. Also, Now this doctrine has been turned on its head. Investment in people, like any other capital investment, is necessary for better returns in the future.

    Fourth is Value:

    Is getting additional value from employees. Also, Employees are capable of producing added value. It is the role of the management to obtain such added value through human resource development and performance management systems. The concept of added value borrows from production economics. It stipulates that an employee can utilize to produce marginal output if properly trained, does the right job, and reward accordingly. Work measurement and matching jobs with the right people; as well as, measuring performance against the set targets and standards stand out clearer under the human resource management school of thought.

    Fifth is employee commitment.

    Organizational success comes from the employees’ total commitment to the organizational mission, goals, objectives, and values. Also, Employees’ understanding of the future of the organization; and, their own future in the organization triggers commitment and hence sustained productivity. It is the task of the management to induce and encourage that commitment.

    Sixth is also based on employees’ commitment.

    Building a strong organizational culture gives managers an advantage in stimulating employees’ commitment. Effective communication, training, coaching, mentoring and performance management processes are effective tools for building a strong corporate culture.

    These philosophies have been accused of being insensitive to the human face of working relationships because they are, in many ways, about tightening the nuts and bolts in every aspect of employment. As a strategy to reduce what seemed too extreme hard-nosed human resource management philosophies and practices (that is employers were becoming too selfish, individualistic, and greedy – trying to maximize whatever possible benefits at the expense of employees); the focus in the 1990s changed somewhat.

    The direction changed more towards team working, employee empowerment; organizational learning, and competency-based human resource management. Also, Human resource management debates of the 1990s and 2000s became focused on trying to understand these new concepts, and, how useful they are in improving human resource management functions in modern organizations. Other areas are the internationalization of human resource management; and, the impact of globalization on human resource management, particularly in the developing world. 

    As Top Objectives of human resource management:

    The objectives of human resource management derive from the philosophies; which tie the emergence and development of human resource management together, both as a discipline and profession (Beer & Spector 1985; Cuming 1985; Armstrong; 1995; Dessler 2005).

    The First Objective.

    The whole aim was on trying to achieve an organizational mission, vision, goals, and objectives using people as valuable resources. Unlike the traditional personnel management theory whereby employees were seen as instruments needed to accomplish work in organizations; human resource management managers recognize and appreciate the need for putting people at the top of the agenda in achieving organizational objectives. As the power of the organization depends on the nature of the workforce; putting employees first in all human resource management functions in the organization; and, making them feel that they are at the top sees as a step further in putting the organization first among competitors.

    The second objective concerns the utilization of staff capacity.

    Successful organizations are those that can fully utilize the potential of their employees. Also, This manifests itself in different approaches used in job design, recruitment, and placement. This includes redesigning jobs so that related jobs can be done by one person, recruitment of multi-skilled employees, part-time work arrangements, sub-contracting etc.

    The third objective.

    Involves ensuring that employees commit to their jobs, teams, departments, and the entire organization. Striving for total employee commitment intends to minimize unnecessary conflicts between the employees; and, the management that could result in low morale among the employees, high employee turnover, and ultimately low productivity. Also, Commitment foster by using various strategies including employees being nurtured through coaching, mentoring, and the provision of lucrative rewards.

    The fourth objective.

    Is to ensure that organizational systems, processes, and activities integrate and synergized through a strong organizational culture. Organizational culture makes up of values, attitudes, norms, myths, and practices that are ‘how things are done around’. Different categories of jobs, professions, and departments see as a ‘whole’ rather than disjointed. Organizational symbols, songs, artifacts, etc. use to foster a culture of uniqueness; which makes employees feel proud of their jobs and the organization.

    The fifth objective.

    Is optimal utilization of available resources. In the language of economics, resources are always scarce. Organizations cannot succeed if resources (employees, finance, machinery and equipment, energy) overutilize, underutilized, or utilize at the wrong time or in the wrong place. Each of these scenarios would suggest that there is a waste of resources because some will easily deplete, unnecessarily leaving them idle or being uses unwisely. In this case, matching resources with performance is a mechanism for monitoring organizational efficiency. Quite often time/activity/outcome and budget schedules use to match resources with performance. Any observed underutilization or overutilization of resources has implications in terms of how the human resources were used and measures are taken accordingly.

    The sixth objective.

    The reason for embracing human resource management practices derives from organizational cybernetics and systems theory whereby the underlying principle is that ‘the sum is less than the whole’. From a human resource management perspective, each job, organizational unit, section, department, and all categories of staff see in their totality. Working together instead of as an individual is a method for improving synergy at all levels. Departmental outdoor training programs are some of the initiatives use to improve synergy at the functional level.

    The last objective.

    But one objective covers the utilities of creativity, innovation, teamwork, and high-quality management as key drivers in organizational excellence. Matching with changing customer needs and expectations requires the presence of an environment for creativity, innovation, team working and an obsession with quality. These ideas largely borrow from Tom Peters and Robert Waterman on an ideal situation for effective organizations in search of excellence, Joseph Schumpeter on the power of creativity and innovation, Joseph Juran, Edwards Deming, and Ishikawa Kaoru on the emphasis of ‘quality in the first time and zero defects’ as part of organizational culture in high-quality management.

    These are cited as key explanations for the excelling of Japanese and other East Asian companies. Decentralization of decision making to the lowest levels in the organization structure, adaptation of flatter organizational structures, open office layouts, team-building exercises, encouragement, support, and reward for innovative ideas; and, the use of quality circles in job performance are some of the strategies used to keep the organization at the cutting edge.

    The last objective is to enable managers to be flexible; and, adapt to changes required in pursuing excellence in human resource management functions. Fast-tracking a change in an organizational environment requires the ability to take prompt decisions and take the right measures before it is too late. Also, Flexibility and adaptation seek to reduce bureaucracy and inflexible working rules and regulations. Above you may understand about Best Human Resource Management HRM Philosophies and Objectives; What matters most is not ‘how the job is done but what is achieved’.

    Human Resource Management HRM Philosophies and Objectives - ilearnlot
    Human Resource Management HRM Philosophies and Objectives
  • Explain Advantages and Disadvantages of Job Analysis!

    Explain Advantages and Disadvantages of Job Analysis!

    Learn and Study, Explain Advantages and Disadvantages of Job Analysis!

    Basically anywhere asking this types of question, What is the Advantages and Disadvantages of Job Analysis? First looking What is Job Analysis?, then Objectives or Purpose of Job Analysis, after that looking study, and Explaining, the Advantages and Disadvantages of Job Analysis! Job analysis is crucial in all human activities but like all human inventions, it also suffers from various limitations. Introduction to Job analysis consists of job responsibilities, information, expertise, capabilities and personal traits and all this lead to success, for the workers. The basic reason for which the organizations require job analysis is to ensure proper selection measures for choosing the suitable applicants. Also learn, Meaning and Definition, Explain Advantages and Disadvantages of Job Analysis!

    A logical selection modus operandi is always necessary to make reasonable and trust-worthy job selections. A genuine selection procedure requires job analysis since it identifies the fundamental requirements for that specific job. The purpose of Job Analysis is to establish and document the ‘job relatedness‘ of employment procedures such as compensation, training, performance appraisal, and selection.

    What is Job Analysis?

    Job analysis helps to recognize and verify the requirements of a job and delineate the duties and obligations of the job. In job, evaluations done on the information collected about the job, the significance should always be given on the job and never on the worker or the individual. The basic notion of job analysis is that the evaluations and judgments are done depending on the job and not on the person.

    It is done through cross-examinations and surveys according to the necessities of the occupation and the analysis provides a specific explanation and requirements of the job.

    Objectives of Job Analysis:

    The aims of Job analysis is to always ascertain and record the job-related information of the employment measures like training, selection, payment and performance assessment. Job Analysis is used for classifying both training and requirement evaluations which consist of the training matter, evaluation exams to understand the usefulness of training, devices used for training and also the techniques of training. Also Learned or More info in here, Purpose of Job Analysis!

    #Advantages and Disadvantages of Job Analysis!

    Though job analysis plays a vital role in all other human-related activities every process that has human interventions also suffers from some limitations. The process of job analysis also has its own constraints. So, let us discuss the advantages and disadvantages of job analysis process at length.

    #Advantages of Job Analysis:

    Provides First Hand Job-Related Information: The job analysis process provides with valuable job-related data that helps managers and job analyst the duties and responsibilities of a particular job, risks and hazards involved in it, skills and abilities required to perform the job and other related info.

    Helps in Creating Right Job-Employee Fit: This is one of the most crucial management activities. Filling the right person in a right job vacancy is a test of skills, understanding, and competencies of HR managers. Job Analysis helps them understand what type of employee will be suitable to deliver a specific job successfully.

    Helps in Establishing Effective Hiring Practices: Who is to be filled where and when? Who to target and how for a specific job opening? Job analysis process gives answers to all these questions and helps managers in creating, establishing and maintaining effective hiring practices.

    Guides through Performance Evaluation and Appraisal Processes: Job Analysis helps managers evaluating the performance of employees by comparing the standard or desired output with delivered or actual output. On these bases, they appraise their performances. The process helps in deciding whom to promote and when. It also guides managers in understanding the skill gaps so that right person can be fit at that particular place in order to get desired output.

    Helps in Analyzing Training & Development Needs: The process of job analysis gives the answer to following questions:

    • Who to impart training?
    • When to impart training?
    • What should be the content of training?
    • What should be the type of training: behavioral or technical?
    • Who will conduct training?

    Helps in Deciding Compensation Package for a Specific Job: A genuine and unbiased process of job analysis helps managers in determining the appropriate compensation package and benefits and allowances for a particular job. This is done on the basis of responsibilities and hazards involved in a job.

    #Disadvantages of Job Analysis:

    Time Consuming: The biggest disadvantage of Job Analysis process is that it is very time-consuming. It is a major limitation especially when jobs change frequently.

    Involves Personal Biasness: If the observer or job analyst is an employee of the same organization, the process may involve his or her personal likes and dislikes. This is a major hindrance to collecting genuine and accurate data.

    Source of Data is Extremely Small: Because of small sample size, the source of collecting data is extremely small. Therefore, information collected from few individuals needs to be standardized.

    Involves Lots of Human Efforts: The process involves lots of human efforts. As every job carries different information and there is no set pattern, customized information is to be collected for different jobs. The process needs to be conducted separately for collecting and recording job-related data.

    Job Analyst May Not Possess Appropriate Skills: If job analyst is not aware of the objective of job analysis process & does not possess appropriate skills to conduct the process, it is a sheer wastage of company’s resources. He or she needs to be trained in order to get authentic data.

    Mental Abilities Can not be Directly Observed: Last but not the least, mental abilities such as intellect, emotional characteristics, knowledge, aptitude, psychic and endurance are intangible things that can not be observed or measured directly. People act differently in different situations. Therefore, general standards cannot be set for mental abilities.

    Explain Advantages and Disadvantages of Job Analysis - ilearnlot

  • Explain the Purpose of Job Analysis!

    Explain the Purpose of Job Analysis!

    Learn and Understand, Explain the Purpose of Job Analysis!

    Job Analysis information has been found to serve a wide variety of purposes. More recently, job analysis data have been used in areas such as compensation, training and performance appraisal among many others. Of particular interest here is the application of job analysis data in HR Selection. Also Learned, Meaning and Definition, Explain the Purpose of Job Analysis!

    As discussed already, job analysis involves collecting and recording job-related data such as knowledge and skills required to perform a job, duties, and responsibilities involved, educational qualifications and experience required and physical and emotional characteristics required to perform a job in the desired manner.

    The main purposes of conducting a job analysis process are to use this particular information to create a right fit between job and employee, to assess the performance of an employee, to determine the worth of a particular task and to analyze training and development needs of an employee delivering that specific job.

    Let’s understand the concept with the help of an example. If the job of an executive sales manager is to be analyzed, the first and foremost thing would be to determine the worth of this job. The next step is to analyze whether the person is able to deliver what is expected of him. It also helps in knowing if he or she is perfect for this job. The process doesn’t finish here. It also involves collection of other important facts and figures such as job location, department or division, compensation grade, job duties, routine tasks, computer, educational, communicational and physical skills, MIS activities, reporting structure, ability to adapt in a given environment, leadership skills, licenses and certifications, ability to grow and close sales, ability to handle clients, superiors and subordinates and of course, the presentation of an individual.

    Broadly speaking in the context of HR selection, job analysis data are frequently used to:
    • Identify employee specifications (KSA) necessary for success on a job.
    • Select or develop predictors that assess important KSAs and can be administered to job applicants and used to forecast those employees who are likely to be successful on the job.
    • Develop criteria or standards of performance that employees must meet in order to be considered successful on a job.

    By examining factors such as the tasks performed on a job as well as the KSAs needed to perform these tasks, one can obtain an idea of what ought to be measured by predictors used in employment screening. When predictors and criteria are developed based on the results of a job analysis, a selection system that is job-related can be developed. By using a job-related selection system we are in a much better position to predict who can and who cannot adequately perform a job. In addition, with a job-related selection system, we are far more likely to have an employment system that will be viewed by job applicants as well as the courts as being a “fair” one.

    #Better Understand the Purpose of Job Analysis:

    Job Analysis plays an important role in recruitment and selection, job evaluation, job designing, deciding compensation and benefits packages, performance appraisal, analyzing training and development needs, assessing the worth of a job and increasing personnel as well as organizational productivity.

    #Recruitment and Selection:

    Job Analysis helps in determining what kind of person is required to perform a particular job. It points out the educational qualifications, level of experience and technical, physical, emotional and personal skills required to carry out a job in desired fashion. The objective is to fit a right person at a right place.

    #Performance Analysis:

    Job analysis is done to check if goals and objectives of a particular job are met or not. It helps in deciding the performance standards, evaluation criteria, and individual’s output. On this basis, the overall performance of an employee is measured and he or she is appraised accordingly.

    #Training and Development:

    Job Analysis can be used to assess the training and development needs of employees. The difference between the expected and actual output determines the level of training that needs to be imparted to employees. It also helps in deciding the training content, tools and pieces of equipment to be used to conduct training and methods of training.

    #Compensation Management:

    Of course, job analysis plays a vital role in deciding the pay packages and extra perks and benefits and fixed and variable incentives of employees. After all, the pay package depends on the position, job title and duties, and responsibilities involved in a job. The process guides HR managers in deciding the worth of an employee for a particular job opening.

    #Job Designing and Redesigning:

    The main purpose of job analysis is to streamline the human efforts and get the best possible output. It helps in designing, redesigning, enriching, evaluating and also cutting back and adding the extra responsibilities in a particular job. This is done to enhance the employee satisfaction while increasing the human output.

    Therefore, job analysis is one of the most important functions of an HR manager or department. This helps in fitting the right kind of talent at the right place and at the right time.

    Explain the Purpose of Job Analysis - ilearnlot

  • How to Development of Human Resource in an Organization?

    How to Development of Human Resource in an Organization?

    Learned, explaining, the Development of Human Resource in an Organization!

    What is Development? The systematic use of scientific and technical knowledge to meet specific objectives or requirements. As well as, An extension of the theoretical or practical aspects of a concept, design, discovery, or invention. The process of economic and social transformation that is based on complex cultural and environmental factors and their interactions. Also, The process of adding improvements to a parcel of land, such as grading, subdivisions, drainage, access, roads, utilities. Also learn, the Inductive Method of Economics, How to Development of Human Resource in an Organization?

    Benefits/ Advantages of Human Resource Development:

    • Development of current employees reduces the company’s dependence on hiring new workers.
    • If employees are developed, the job openings are more likely to fill internally.
    • Promotions and transfers also show employees that they have a career, not just a job.
    • The employer benefits from increased continuity in operations and from employees who feel the greater commitment to the firm.
    • Increase the productivity of employees.
    • It helps in the career development of organization and employees too.

    Human resource development is also an effective way to meet several challenges, includes:

    1. Employee obsolescence!

    • Obsolescence results when an employee no longer possesses the knowledge or abilities needed to perform successfully.Or
    • It may result from a person’s failure to adapt to new technology, new procedures, and other changes. Also, The more rapidly the environment changes, the more likely it is that employees will become obsolete.
    • Employers are reluctant to take strong action and fire an obsolete employee, particularly employees who have been with the company a long time.
    • Proactively assessing the needs of employees and giving them programs to develop new skills can avoid employee obsolescence.
    • If these programs are designed reactively, after obsolescence occurs, they are less effective and more costly.
    • When an employee reaches a career plateau, obsolescence may be more likely.
    • A career plateau occurs when an employee does well enough no to be demoted or fired but not so well that s/he is likely to promote.
    • Motivation to stay current may reduce when an employee realizes that s/he is a career plateau.

    2. International & Domestic Workforce Diversity:

    • Workforce diversity causes many organizations to redesign their development programs.
    • Role-playing and behavior modeling are more effective ways to train and develop employees for facing the challenges the workforce diversity.

    3. Technological change:

    • Rapid changes in technology require the firms to engage in nearly continuous improvement.
    • Technological changes having a profound impact on training and development increases the need to assess the developmental requirements of current and future managers, professional and technical peoples.

    4. Development, EEO and affirmative action:

    Training and development activities must conduct in such a way that they do not discriminate against protected classes. Also, How is important change Management the Success of a Business?

    5. Employee Turnover:

    • Turnover – the willingness of employees to leave one organization for another.
    • Departures are largely unpredictable, development activities must prepare employees to succeed those who leave.
    • Some employer with excellent development programs finds that training programs contribute to employee turnover. Therefore, they are reluctant to invest money in workers who may then take their new skills to a new job at a higher-paying competitor.
    • After evaluating the importance of training and development programs, the organizations realize that it is better to have some trained employee who may leave than to have an untrained workforce that says.

    How to Development of Human Resource in an Organization - ilearnlot
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  • The Objectives of Human Resource Management!

    The Objectives of Human Resource Management!

    Learned, The Objectives of Human Resource Management!

    Successful human resource management enables a firm to flourish, but for the success of human resource management, the team must have a clear objective. Guide to three different types of objectives for human resource management. HR professionals should know how to understand and select these basic objectives. Also, How is important change Management the Success of a Business? The Objectives of Human Resource Management!

    Objectives for Employees!

    An essential component of human resource management involves establishing objectives for employees. When selecting objectives for employees, managers should consider whether the business is the most important. For example, if sales are important for businesses, increasing employee sales skills is an example of an intelligent purpose. According to “Managing Human Resources Through Strategic Partnerships,” Employees with the skills to activate employees to make. The advances of improvement in the process, to communicate effectively with the most important human resource objectives, to employees Training, and awareness of the employees and the understanding of the needs of the customers are increasing.

    Strategic Objective!

    Strategic objectives in human resources management are not related to individual employees, but in the form of a whole, with employees. Common strategic human resource objectives include reducing employee turnover, increasing employee morale and reducing employee absence. Also, in order to achieve these goals, human resource managers should implement specific measures aimed at fulfilling them. For example, to increase employee morale, a Human Resource Manager might increase employee profits, add financial incentives to reduce workloads or perform employee performance. Definition, Importance, and Affected Factors of Manpower Planning!

    Financial Objectives!

    Many financial objectives can measure human resource management. Common measures include HR return on investment, HR expenditure ratio, and HR revenue ratio. The Human Resources withdrawal benefit from the investment is made by the firm divided by the labor and profit costs. Also, Calculating the HR expense ratio by simply dividing HR expenditure by all operating expenses. Human Resource Revenue Ratio is a computation of total revenue divided by the number of employees. Each organization will have specific human resources finance aims that. This achievement will want to allow these metrics to assume higher management personnel against the actual realization of these goals.

    Selection of the Objective!

    The manager should select the human resource objectives according to the Smart Criteria. Which say that the objectives are specific, measurable, which action should be relevant and timely. For example, a firm not only aims to increase the employee’s performance. A better aim is to increase employee sales to 35 percent in the next six months. The objective is that the smart criteria are likely to be easy and more successful to keep an eye out. International and Comparative Human Resource Management!

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  • What is the Meaning and Objectives of Accounting?

    What is the Meaning and Objectives of Accounting?

    What is accounting? Meaning and Objectives of Accounting; Different scholars and Institutes have defined accounting differently. The important among them are as follows: According to Smith and Ashburne, “Accounting is the science of recording and classifying business transactions and events, primarily of a financial character and the art of making significant summaries, analysis and interpretations of these transactions and events and communicating results to persons who must take decisions or form Judgement.” Also learn, The Difference between Revaluation and Realization Account.

    Understanding, learn Meaning and Objectives of Accounting. 

    The Committee on Terminology, appointed by the American Institute of Certified Public Accountants defined accounting as, “Accounting is the art of recording, classifying and summarizing in a significant manner and in terms of money, transactions and events which are, in part at least, of a financial character and interpreting the results thereof.”

    In fact, this is the popular definition of accounting that outlines fully the very nature and scope of accounting activity. The sum and substance of accounting, thus, is from the recording of transactions to communicating the results thereof to the concerned parties.

    Objectives of Accounting:

    The following are the main objectives of accounting:

    1. To maintain full and systematic records of business transactions:

    Accounting is the language of business transactions. Given the limitations of human memory, the main objective of accounting is to maintain ‘a full and systematic record of all business transactions.

    2. To ascertain profit or loss of the business:

    Business is run to earn profits. Whether the business earned the profit or incurred loss is ascertained by accounting by preparing Profit & Loss Account or Income Statement. A comparison of income and expenditure gives either profit or loss.

    3. To depict the financial position of the business:

    A businessman is also interested in ascertaining his financial position at the end of a given period. For this purpose, a position statement call Balance Sheet is preparing in which assets and liabilities are shown.

    Just as a doctor will feel the pulse of his patient and know whether he is enjoying good health or not, in the same way by looking at the Balance Sheet one will know the financial health of an enterprise. If the assets exceed liabilities, it is financially healthy, i.e., solvent. In the other case, it would be insolvent, i.e., financially weak.

    4. To provide accounting information to the interested parties:

    Apart from the owner of the business enterprise, there are various parties who are interested in accounting information. These are bankers, creditors, tax authorities, prospective investors, researchers, etc. Hence, one of the objectives of accounting is to make the accounting information available to these interest parties to enable them to take sound and realistic decisions. The accounting information is creating available to them in the form of an annual report.

    Also, These Objectives of Accounting is useful!

    Every activity that a business firm does must do for a reason and accounting is no exception. Accounting helps the company achieve a myriad of objectives. Here is the list of objectives that accounting helps the company to obtain.

    #Permanent Record

    Any business firm needs a permanent record of the transactions that it indulges in. These records could require for the internal purpose, for taxation purpose or for any other purpose. Accounting serves this function. Whenever the organization commits any resource of monetary value either within the firm or outside the firm, a record is creating. This permanent record is held on for years and can retrieve as and when need be.

    #Measurement of Outcome

    A business firm may indulge in numerous transactions every day. It may make the profit in some of these transactions while it may make losses in some other transactions. However, the effect of all these transactions needs to aggregate over a period of time. There must be daily, weekly and monthly reports which provide information to the organization about how well it is performing its activities. Accounting serves this purpose by providing periodic financial statements which help the firm adjust their operations accordingly.

    #Creditworthiness

    Firms need resources for their functioning. They do not have any capital stock at hand and need to obtain them from investors. Investors will give money to the firm only if they have reasonable assurance that the firm will able to generate enough profit. Past accounting records help a great deal in proving this. All kinds of investors from banks to shareholders ask for past accounting details before they trust the management with their money.

    #Efficient Use of Resources

    Firms can also conduct useful internal analysis with the help of accounting data. Accounting records tell the firm what resources were commits to what activity and what time. These records also summarize the return that was obtained from these activities. Management can then analyze past behavior and draw lessons about how they could have performed better and used resources more efficiently.

    #Projections

    Accounting helps management and investors look forward. Costs and revenue growths can project after substantial data has been accumulating. The assumption made is that the company is likely to behave exactly as it has done in the past. Thus, analysts can make reasonable assumptions about the future based on the past record.

    What is Meaning and Objectives of Accounting
    What is the Meaning and Objectives of Accounting?

    Reference

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